Morgan Stanley reported a better-than-expected second-quarter profit, driven by a surge in investment banking despite muted growth in wealth management. The bank’s shares rose 1.4% in morning trading, reversing premarket losses. Wealth management revenue growth slowed to 2% from a 16% jump a year earlier, with net new assets at $36.4 billion, down from $89.5 billion last year.
The wealth management unit’s revenue of $6.79 billion slightly missed Wall Street expectations. Despite uneven growth in net new assets, affected by higher client tax payments, annual growth remained within the company’s expected range of 5% to 7%. Analysts, including Keith Horowitz at Citigroup, described the results as reflecting an “overall solid quarter” and maintained confidence in Morgan Stanley’s wealth management strategy, which aims to manage $10 trillion in client assets.
Morgan Stanley’s net income rose to $3.1 billion, or $1.82 per share, for the quarter ending June 30, compared to $2.2 billion, or $1.24 per share, a year earlier, surpassing the analysts’ average expectation of $1.65. The wealth business, cultivated under former CEO James Gorman, continues to provide stable revenue amid more volatile market-sensitive operations like investment banking and trading.
